[Internal report shows Detroit's first three quarters of 2007]
That's a screenshot I cobbled together from an internal Gannett report, the appropriately titled Cost & Statistical Summary, for the first three quarters of 2007 (periods 1-9). These monthly reports tracked the company's U.S. dailies across 50 or so different revenue and spending categories; I don't think they're published anymore.
The reports disclose one of Gannett's most closely guarded secrets: profit margins at the company's community newspapers, which next week are expected to lay off perhaps thousands of employees across the country.
Yesterday, I breezed through two of these reports, covering what looks like every Gannett newspaper, except USA Today, for most of last year and all of 2006. The slice above shows Detroit -- principally, the Detroit Free Press. A Gannett Blog reader gave me a copy of the reports, under two conditions. The reader asked to remain anonymous, citing possible repercussions if they were identified. And they asked that I not share copies with anyone. (The detail above is purely for illustration.)
A rare peek inside
Although the 2007 report is a year old, it nonetheless offers a rare point-in-time snapshot of the financial performance of individual papers as they entered what turned out to be a devastating 2008.
I've put Detroit up on the whiteboard as an example, and a starting point. This is the first time I've seen one of these reports, so I'm once more reaching out to the retired publishers and controllers among my readers who've helped in the past. First, I'll tell you what I think the data show -- then please correct me where I'm wrong. Once I've mastered Detroit, I can report some figures for more than 80 other papers.
What I see
Detroit was losing money by the end of last year's third quarter. (Surprising: I thought only some of the New Jersey papers were in the red.) Profit margin sank to a negative 4.96% vs. a barely positive 0.31% a year before. In fact, it shows Corporate wanted Detroit to raise its margin last year -- to 2.01%. Question: Are these figures for the Free Press and the Detroit News -- or just the Freep?
The culprit, no surprise: plunging ad revenue. (Subscription sales and other circulation revenue aren't provided for any paper.) Detroit sold $164.8 million in ads in the first three quarters, down 15% from $192.7 million a year before, the report shows. Corporate had budgeted $190.2 million.
So, how did I do?
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[Image: today's Freep front page, Newseum]